Mind the gap: Filling the experience void in claims settlements

November 20, 2017 / 3 min read

The experience shortage on the horizon for insurance carriers has been well documented. Today, less than a third of the current insurance workforce is under 35 years old,¹ and it’s predicted that more than a quarter of insurance professionals will be approaching retirement in the next few years.²

The challenge to get new professionals up to speed

Clearly, there will be a dramatic shift in the average experience level of insurance professionals. Consequently, in addition to the challenge of recruiting new adjusters, claims managers will also need to determine how to train new staff to fill the experience gap.

headway-5QgIuuBxKwM-unsplash

One area that will be significantly affected is workers’ compensation and bodily injury claims. In years past, junior adjusters consulted senior staff to help develop settlements for complicated cases. In the near future, without the availability of many of those veteran adjusters—who could base their valuations on years of experience with hundreds of similar claims—gaining this knowledge will become a much steeper hill to climb.

There are no shortcuts to this experiential knowledge. Articulating rationales for numbers or detailing the methods used to arrive at settlements is difficult, especially for complex claims. Even senior adjusters are likely to arrive at different settlements for complex cases, with some claims being overvalued, others undervalued. This lack of consistency can unfairly impact claimants as well as insurers.

The challenge of settling complex claims consistently

Without adequate claims-handling experience, the best way to ascertain how a claim might turn out is by reviewing outcomes from past cases with similar facts and injuries. Based on a history of comparable claims, adjusters can uncover why a claim may be more complex than it appears. This insight enables them to better estimate the expected cycle time, more accurately anticipate future medical costs, and get a feel for a possible settlement range. Armed with the right examples, adjusters can also make better decisions on authorizing treatment, setting reserves, and identifying which cases are ready to be resolved.

The power of comparable claims

Finding which previous claims are comparable is like searching for that proverbial needle in a haystack (an exercise few adjusters have time for). Yet these similar cases do exist—it’s simply a matter of being able to unearth them quickly and efficiently.

Sorting through hundreds of case files—looking for ones that have similar injury types and medical histories (or in workers’ compensation, similar employers and job descriptions)—is both time-consuming and unlikely to lead to the best matches. The industry has a clear need for ways to automate the identification of matching historical claims. Without clean, integrated, and distilled data available to point the way, it’s a guessing game at best.

Aggregated case histories bridge the experience gap

We have developed a new solution—Case in Point—that draws upon insurers’ own historical claims to provide settlement guidance. The tool provides claims handlers with vital claims intelligence and decision support to improve insight at critical points in the claim life cycle for both workers’ compensation and third-party liability claims. The solution’s claims-matching analysis pinpoints claims with the most similar injuries and severity for better claims management and settlements. This innovative platform will bring greater control and consistency to claims teams for more informed claim evaluations and settlement negotiations. It’s one way that technology can prepare new adjusters and support experienced staff in meeting the needs of injured claimants.

United States Department of Labor, (2017, February 8). Labor Force Statistics from the Current Population Survey. Retrieved from https://www.bls.gov/cps/tables.htm#charemp
McKinsey & Company, Inc., Clements, R., Bradicich, K., Buman, M., & Catlin, T. (2010). Building a Talent Magnet: How the Property and Casualty Industry Can Solve Its People Needs